SK Hynix's second-quarter net profit surged 13-fold on strong demand for advanced chips, but its overall results fell short of high market expectations, doing little to ease concerns about artificial-intelligence infrastructure spending.
The mixed results from the world's second-largest memory-chip maker underscore investors' lofty expectations for the Nvidia supplier that helped shares quintuple over the past year amid the continuing AI boom.
Striking an optimistic tone, the South Korean company on Wednesday maintained its bullish outlook for the second half of 2026, citing tight supply and strong demand for AI memory chips.
SK Hynix also said it expects its capital investments to reach the upper end of its 40 trillion won guidance this year, up from roughly 30 trillion won in 2025, as it continues to ramp up production capacity.
On the earnings call, executives said strong memory-chip demand could persist for years. The chip maker already secured long-term supply deals with about 10 customers, based on robust AI-chip demand, and is in talks with others on additional multiyear agreements, they said.
Net profit soared to a record 93.923 trillion won, equivalent to $64.64 billion, for the three months ended June, up more than 1,200% from a year earlier. That beat analysts' expectation of 50.785 trillion won, according to a FactSet-compiled consensus.
Revenue more than tripled to 79.319 trillion won and operating profit rose more than sixfold to 60.543 trillion won, both reaching all-time highs but missing street views. Analysts were looking for 84.170 trillion won and 64.311 trillion won, respectively.
The company touted its strong performance for the first half of the year, noting that cumulative revenue surpassed 100 trillion won for the first time.
In the second quarter, pretax profit exceeded 120 trillion won, buoyed by more than 60 trillion won in investment gains. Analysts estimated that SK Hynix gained from its stake in Japanese chip maker Kioxia through U.S. private-equity firm Bain Capital. Bain recently sold part of its Kioxia stake.
SK Hynix said strong demand for pricier high-bandwidth-memory chips and other AI memory products led the solid quarterly performance.
Shares of the company have roughly doubled this year despite their recent tumbles amid investor skepticism over AI-related investment and the chip demand it has fueled.
The stock rose briefly after the results, only to turn lower to trade down 18%, putting it track for its worst day ever. Shares have lost more than half their value from their June peak due to a selloff of chip stocks.
"SK Hynix has delivered the type of quarter most companies could only dream of, but it entered these results priced for perfection," said Josh Gilbert, a lead analyst at multiasset electronic trading platform service provider eToro. "Its second quarter is a lesson in just how high the bar now sits for anything tied to AI."
Some analysts say the company's earnings momentum could sustain for several more quarters, even years, supported by higher chip prices amid robust AI demand.
Last week, SK Group, parent of SK Hynix, announced a half-trillion dollar comprehensive partnership agreement with Nvidia to establish AI infrastructure serving surging demand for global compute.
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